summary of the bullet points from the company’s concall transcript:
Revenue and Financials:
- Q1 FY24 revenues declined by 20% due to lower sales of insoluble sulphur and correction in sales prices of sulphur and acid.
- EBITDA grew by 15% and profit after tax increased by 9% for the same period.
- Margins improved due to correction in international freight costs and reduction in sulphur prices.
- The company is debt-free and has a positive net cash position.
Industry Outlook:
- CV industry expected to grow mid- to high single digit in FY24, driven by promising monsoon and government efforts to boost infrastructure.
- Indian tyre manufacturers anticipate investing INR 5,000 crores in FY23 and FY24, driven by strong demand for radial tires in the domestic market.
- Demand weakness in Europe attributed to inventory correction and challenges faced by European tyre companies.
- OCCL’s market share expected to increase with additional orders and evolving trends in the tyre industry, including the growth of electric vehicles.
Expansion and Market Share:
- OCCL focused on expanding in geographies like North America and increasing market share in India.
- Current capacity utilization for insoluble sulphur below optimum levels, but additional orders expected next year to utilize expanded capacity.
- Demerger proposed by OCCL awaiting approval from NCLT, with next hearing scheduled for October 11, 2023.
Guidance and Demand:
- Company does not provide specific guidance on margins or volumes due to various factors affecting costs and demand.
- Demand for insoluble sulphur expected to grow between 3% to 4% on a long-term basis.
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